Coronavirus: Impact on Landlords in New York City

I wrote a blog post about the idea that residents are moving out of New York. I recently came across a couple articles that looked at the situation from the landlord's side.

This Complex via Yahoo (Oct 29) article rpeorts:

[Harlem building owner Stacey Golia] said more than half of her two-bedroom units are currently vacant, suggesting remote college courses and closed campuses were a major factor in the shortage of tenants. She explained that while many renters are receiving assistance to get them through the crisis, small building owners have been left to fend for themselves. 

"Even though the units are vacant right now, I'm still paying as if the entire building has been occupied," said Golia, who shells out $100,000 a year in mortgage payments and property taxes. "It's financially detrimental. There are rent pauses, there are court pauses. But there are no pauses on property taxes ... Just because you're a landlord doesn't mean you have a pot of gold sitting at the end of a rainbow." 

Okay, for Golia specific, this seems to be a temporary problem. Her residents are college students who will at some point return to New York City. If learning remotely becomes permanent, I would be wrong. On the other hand, I remember my college years and those were some of the best years of my life. Why wouldn't one want to be surrounded by 1,000s of people your own age. 

There is a video report embedded in the article that interviews two landlords. Jan Lee owns a building that is a mix of rent controlled apartments and market rate store fronts. The market rate store fronts off-set the losses associated with the rent controlled apartments. Now those store fronts can only pay a fraction of their rent. Joanna Wong, another landlord, mentions that 40% of city budget comes from property taxes.

Okay, so this indicates why rent control causes problems -- the rent from the apartments results in a loss. I don't always trust folks when they toss out financial numbers so I wasn't sure about the 40% of the city budget coming from property taxes so I did a Google search and it does appear that Joanna Wong is correct. 

This leads to this WABC via Yahoo (Oct 29) video, which basically reports what is in the Complex write-up; however, it does add in some comments from Mayor Bill de Blasio who states when asked about giving property owners a break, "It is no one's fault. Everyone deserves help to find a way through. That can only come in one form, which is a federal stimulus." 

The Mayor's initial stance is to not provide property owners with tax relief. Instead, there is a hope that the federal government will bailout New York City.